Understanding odds is a fundamental part of betting, and it can seem daunting for betting newcomers.
Anyone who places bets should take the time to understand and learn how to calculate odds. The odds represent your selection’s likelihood of winning in the eyes of the bookies, as well as the amount of money you stand to gain if your bet is successful.
Although betting odds appear confusing at first, this comprehensive guide will equip you with the knowledge of how they work so you can make educated decisions when gambling online.
What are betting odds?
Bookmakers produce betting odds to indicate what they believe is the likelihood of an event occurring.
In the UK and Europe, these odds are expressed as a fraction (2/1) or a decimal (3.0).
Betting odds apply to every event on which bookies accept wagers, from football to TV shows and politics.
What is probability?
Probability refers to how probable something is to occur. If the bookmaker predicts a high probability for an event, it is more likely to occur than not, and vice versa.
UK bookmakers represent probability as a fraction, which is two integers (whole numbers) separated by a forward slash e.g. 1/2.
A coin flip with two potential outcomes, heads or tails, is a basic example of probability. The likelihood of obtaining heads is one in two, which may be expressed by odds of 1/1, implying that the outcome has a 50% chance of winning. This is how punters can use odds to calculate how likely bookmakers believe an outcome is to happen.
How to calculate probability using betting odds
Now that you know odds are two numbers separated by a forward slash, you may use them to calculate the likelihood of an event occurring.
The way to determine probability (in percentage terms) using bookmakers’ odds is best explained by substituting the two numbers in the odds with letters. As an example, 2/1 becomes A/B. The formula is:
Probability (%) = B/(A+B)
Here are some instances of betting odds that have been turned into percentages to determine the chance.
- 1/1 can be calculated as 1/(1+1) = 0.5 – there is a 50% chance this outcome will happen.
- 2/1 can be calculated as 1/(2 + 1) = 0.33 – there is a 33% chance this outcome will happen.
- 4/1 can be calculated as 1/(4 + 1) = 0.20 – there is a 20% chance this outcome will happen.
- 10/1 can be calculated as 1/(10 + 1) = 0.09 – there is a 9% chance this outcome will happen.
How to read betting odds
Now that you understand how to calculate the probability or likelihood of an event occurring, you can use the betting odds to determine the possible returns if you bet on it.
Fractional odds tell you the potential winnings in relation to the amount you place on the bet. For example, if you bet £1 on Team A to defeat Team B at 4/1, you will receive £5 if you win (£4 profit plus your £1 wager). More examples of how to interpret odds can be found below.
- 10/1 for every £1 bet = £10 profit plus £1 stake
- 7/2 for every £2 bet = £7 profit plus £2 stake (or for every £1 bet = £3.50 profit plus £1 stake)
- 1/2 for every £2 bet = £1 profit plus £2 stake (or for every £1 bet = 50p profit plus £1 stake)
Any odds where the first number is more than the second are “odds against”, while any odds where the first number is less than the second are “odds on”. Bookmakers believe that odds-on events are more likely to occur than odds-against ones, and vice versa for odds-against events.
How decimal odds work
When the potential winnings are converted to decimals, they include the stake, so you simply multiply the stake by the betting odds. Decimal odds are often utilised as the user, rather than the bookmaker, controls the odds. You can find examples as follows.
- 11.00 odds = £1 bet would return £11 including stake
- 4.5 odds = £1 bet would return £4.50 including stake
- 1.5 odds = £1 bet would return £1.50 including stake
That concludes our comprehensive guide of how betting odds work, so you now understand how to read odds, what the chance of a bet winning is (based on the odds), and what your potential winnings will be.
You’re now ready to start betting! If you want to register an account with a bookmaker, take advantage of the fantastic offers for new customers on Best of Bets.